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Online car market Bring a Trailer said it expects to close out the year with a record $1.35 billion in sales, as a new generation of collectors logged on to buy classic and pre-owned cars.
Randy Nonnenberg, Bring a Trailer’s co-founder and president, told CNBC that sales for the year are up 63% from 2021, when sales hit $829 million.
The San Francisco company’s website has made it easy for collectors to buy and sell cars online and attracted a flood of young car traders during the Covid pandemic, selling everything from seven-figure Ferraris to $60,000 Corvettes and $15,000 Saabs.
The question now is whether the pandemic-fueled frenzy of car collecting will hold up if there is a recession. Nonnenberg said he sees no evidence of a slowdown in the company’s business.
“The big challenge we have is handling all the demand,” he said.
While Bring a Trailer, which was acquired by Hearst Autos in 2020, has disrupted the traditional business of buying and selling collector cars, traditional classic car auction companies like Mecum, RM Sotheby’s and Gooding & Co. also had strong years in 2022. Hagerty, the classic car insurance company, also entered the auction business, buying Broad Arrow and launching Hagerty Marketplace, an online sales platform.
Rising interest rates, recession fears and increasing car inventories have started to pressure used-car prices and demand. Nonnenberg said some car prices have drifted lower, with the average sale price down slightly in the second half of 2022.
Yet he said Bring a Trailer’s business model − based on low-cost, easy-to-use and efficient car buying and selling − could benefit in a downturn. Sellers pay a flat fee of $99, while the buyer fee is 5% on top of the final sale price with a cap of $5,000. That’s far less expensive than traditional auctions or many dealers.
“There will continue to be horse trading,” Nonnenberg said. “If people have had their car for three or four years, and they want something else, or their financial situation changes suddenly and they have six cars and they want to sell two, that’s still good for our business model.”
Bring a Trailer’s growth this year was driven by higher sales volume and car values. Up to 700 cars were sold each week and the average value of the cars sold was $54,495, up from $47,500 in 2021.
This year, 145 cars sold for more than $500,000 , up 172% from 2021, as the company attracted wealthier buyers and sellers. A 2017 Ferrari LaFerrari Aperta that sold for $5.36 million in May was its most expensive car ever sold.
Along with growing sales volume, Bring a Trailer wants to expand its community of collectors and car enthusiasts. It has over 900,000 registered users, and about 413,000 registered bidders. It’s also planning to roll out more in-person events and is working with partners in local markets to expand services to buyers and sellers, Nonnenberg said.
For 2023, Nonnenberg said the big goal is using beefed-up technology to reduce wait times to list cars. It now takes an average of 26 days between submitting a car for listing and going live on the site, and Nonnenberg said, “we would like that to come down to 10 days, that’s the noble goal.”